At the moment, the ECB would use any argument to support its dovish message. Slower Chinese demand and resulting lower commodity prices are nice 'anti-tapering' elements that should help tame the hawkish side of the Council. This is another way to step up the rhetoric, but it is not expected to push the ECB into action before September.
The board would first need to see a sign of aggregate softening in European indicators-soft data is currently weak in Germany but decent everywhere else-coupled with tighter financial conditions. So, at the margin, the Chinese risk would provide an additional spur for the ECB to engage in further action in September or react to tail risks in Greece, but is not enough in isolation.


BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence
MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks
FxWirePro: Daily Commodity Tracker - 21st March, 2022 



